Correlation Between Equitable Holdings and NMI Holdings
Can any of the company-specific risk be diversified away by investing in both Equitable Holdings and NMI Holdings at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Equitable Holdings and NMI Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equitable Holdings and NMI Holdings, you can compare the effects of market volatilities on Equitable Holdings and NMI Holdings and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Equitable Holdings with a short position of NMI Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equitable Holdings and NMI Holdings.
Diversification Opportunities for Equitable Holdings and NMI Holdings
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Equitable and NMI is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Equitable Holdings and NMI Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NMI Holdings and Equitable Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Equitable Holdings are associated (or correlated) with NMI Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NMI Holdings has no effect on the direction of Equitable Holdings i.e., Equitable Holdings and NMI Holdings go up and down completely randomly.
Pair Corralation between Equitable Holdings and NMI Holdings
Assuming the 90 days horizon Equitable Holdings is expected to generate 1.25 times more return on investment than NMI Holdings. However, Equitable Holdings is 1.25 times more volatile than NMI Holdings. It trades about 0.12 of its potential returns per unit of risk. NMI Holdings is currently generating about 0.11 per unit of risk. If you would invest 4,158 in Equitable Holdings on September 1, 2024 and sell it today you would earn a total of 322.00 from holding Equitable Holdings or generate 7.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Equitable Holdings vs. NMI Holdings
Performance |
| Timeline |
| Equitable Holdings |
| NMI Holdings |
Equitable Holdings and NMI Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equitable Holdings and NMI Holdings
The main advantage of trading using opposite Equitable Holdings and NMI Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equitable Holdings position performs unexpectedly, NMI Holdings can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in NMI Holdings will offset losses from the drop in NMI Holdings' long position.| Equitable Holdings vs. NN Group NV | Equitable Holdings vs. Superior Plus Corp | Equitable Holdings vs. Origin Agritech | Equitable Holdings vs. Identiv |
| NMI Holdings vs. KIMBALL ELECTRONICS | NMI Holdings vs. UET United Electronic | NMI Holdings vs. BYD ELECTRONIC | NMI Holdings vs. Benchmark Electronics |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |